NIB President: Nordic success must not end in complacency

The Nordic success story is built on some salient external and internal factors which are in the best of cases disappearing and in the worst of cases turning against us, Johnny Åkerholm, NIB President and CEO, said in his key address at the Post Davos Nordic Summit 2011 in Stockholm.

“The question many ask themselves is how a model that taxes so heavily can be so successful. The answer to this is that the level and quality of the public services have been high and that these have supported important growth factors,” Mr Åkerholm reasoned.

The inclusive welfare state model made it possible to engage talent on a wide front and provided for social and occupational mobility, building a foundation for innovation.

The Nordic model is cited by political leaders around the world and it was discussed at the recent World Economic Forum in Davos. This week about 100 key decision-makers from government and major companies across the Nordic region met to discuss how to secure the region’s competitiveness in a challenging global economy.

Size matters
One of the challenges facing the Nordic region is its size.

“During the Cold War, markets were fragmented. The Nordics were in those circumstances large enough to make a difference on a global scale,” Mr Åkerholm said.

“With globalisation, the relative size of the Nordic countries has shrunk; they make up less than 0.4% of the global population and a little more than that of the global economy. We are lost on the global map.”

Internally, demography is a clear threat. Having an ever growing part of the population in retirement is changing the welfare model.

 “The welfare model is increasingly becoming a social model. The resources go to the support of the passive population rather than to the engagement of the active population,” Mr Åkerholm said before challenging the audience: “Has doing nothing become a part of the Nordic welfare model?”

According to him, the modern welfare state must ensure incentives for work and mobility and create better incentives for entrepreneurship and risk-taking in order to deal with the changing structure in the population.

Use NIB
As for the size problem, the best solution is to band together. “We have more opportunities to make a global difference as a region than as individual countries,” Mr Åkerholm said.

The business sector should be in the driving seat for this cooperation, he emphasised, adding that the political constraints are obvious as the political leaders are elected on a national basis. NIB, however, can help.

“NIB tries to translate political intentions into action. We offer financing to projects that promote and develop regional cooperation, such as the regional energy market and regional transport and logistics, which is necessary for the creation of a more coherent region,” Mr Åkerholm concluded.